Monday, November 16, 2009

Electronic Payments and the "Virtual Wallet"

A story in today’s New York Times describes some of the progress being made by the “electronic payment” industry in its search for new and innovative ways for Americans to pay for things. The story points out something that should be obvious if we ever took the time to think about it (although most of us have not) namely that the way humans obtain goods and services has changed only a few times throughout our existence. Bartering gave way to coins which gave way to paper money which was eventually joined by paper checks which all have just recently given way to plastic credit and debit cards. Our next method of payment (already available but not yet adopted to any great degree) might be called the “virtual wallet” which describes a source of funds that is accessible electronically either through the use of a password or an interactive device, most likely a cell phone. Even though this new technology is feasible and available now, it’s has not yet reached the desirable stage because credit and debit cards seem to fulfill all of our current requirements.

Here at the registry we’re interested in the virtual wallet for a couple of reasons. We still handle small amounts of cash received in payment for document copies printed by customers here at the registry. Because so much of our holdings are freely available online, the amount printed here at the registry has greatly decreased through the years, but some still exists. Converting those dollar bills that still come across our counter into electronic micropayments would be much more efficient. The other major inefficiency I see, not just for the registry, but for the entire system, is the practice of paying recording fees and tax stamps by check. It seems that the entire real estate financing system is electronic until it reaches the registry. There, a check is written by hand and processed by hand with data that already exists in digital form being repeatedly keyed into computer systems at the registry, at banks, back at the lawyer’s office, everywhere. That’s not only efficient, it increases the odds of errors being made (have you ever tried to read a lawyer’s handwriting on a check or anywhere else?).

Because people seem satisfied with the established way of paying charges at the registry and elsewhere, a “if it ain’t broke, don’t fix it” attitude will ensure that these new, more efficient methods of payment are slow to be adopted here and elsewhere.

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